Should a software company build a professional services organization despite the effect on margins and multiple?

Craig Courtemanche · Dec 4, 2023

Founders facing long adoption timelines should not simply wait — they should generate revenue by any means, including services work unrelated to the core product, because the only thing that matters is surviving to fight another day

Procore took $30k custom development jobs, putting two engineers on software that had nothing to do with Procore, purely to keep the lights on through lean years; revenue is oxygen to the business

Scope: he isn't sure those were the best ideas, only that they kept the company alive

16:56 20VC: From Construction Worker to Billionaire CEO; The 21-Year Epic Journey of Procore to an $8.6BN Company, Advice from Tobi at Shopify on Being a Great CEO & Why The Idea of "Becoming an Entrepreneur" is BS with Tooey Courtemanche

Fabien Pinckaers · Feb 12, 2025

Selling services and custom development is a bad business model but a workable way for a bootstrapped company to fund itself and build features

Bootstrapping requires cash, and services was his only source; it took the company to 100 people even though he struggled and came close to bankruptcy several times

Scope: only applies when bootstrapped; led to years near bankruptcy

8:26 20VC: The $5BN Company Built from the Belgian Countryside | The Story of Odoo: The Company with No Plans to Sell, IPO & Their Billionaire Founder Who Does Not Care About Money with Fabien Pinckaers, Founder & CEO @ Odoo

Carles Reina · Apr 11, 2026

Charging for every service turns the customer relationship into a transaction rather than a community and long-term retention play

You should be incentivizing both community and trust and the long term, not billing every penny

15:32 Do not bill every service community over transaction

Fabien Pinckaers · Feb 12, 2025

A software vendor entering enterprise ERP should minimize implementation service revenue and build radically more efficient methodologies rather than mimic service companies

The market is owned by service companies where ERP costs millions in implementation; service is only 18% of Odoo's revenue and is necessary only to get clients live, so selling the least service possible forced them to develop lighter methodologies

58:49 Minimize implementation services and build radically more efficient methodologies to disrupt service dominated erp

Chris Degnan · Nov 10, 2023

A professional services organization run as a low-margin enablement function is highly valuable, contrary to the view that services hurt your multiple.

It stays profitable at single-digit margin so isn't a money loser, it drives product consumption, and it produces the training and enablement content distributed to customers and partners.

49:15 Low margin ps drives consumption and enablement